Re: ISP/Video Competition

Combat Chuck

If you think TW has been looking ahead, you are deluding yourself. It has been obvious what direction the bandwidth usage has been headed for years. Yet, TW still has a ton of systems still running D1.1 and D2. If they had really been looking forward, a significant amount of their footprint would be D3 today.

All cable companies (or companies in general) have debt. Take a look at their 10k. After expenses they still made 4 BILLION dollars. Spend, say 1/3 of that, on network upgrades (today) and they will no longer have capacity issues for the next few years. You are correct in that the demand for more bandwidth will continue to grow. But the way to handle that is to plan for the future and provide the capacity for that bandwidth, not to try and stop it. Essentially what they are doing is like a car company selling a car that you can only drive 40 miles a day. If you want to drive more than 40 miles a day, they are going to charge you $1/mile. All trying to do stuff like this is going to accomplish is to drive customers elsewhere.

As far as other ISPs watching this; sure if customers are actually stupid enough to put up with this, they will want in on the action too. If customers will put up with it, any business would be foolish not to try something that will ten fold their profit margins. There is nothing in this that the ISPs have to do this.

If you think TW has been looking ahead, you are deluding yourself. It has been obvious what direction the bandwidth usage has been headed for years. Yet, TW still has a ton of systems still running D1.1 and D2. If they had really been looking forward, a significant amount of their footprint would be D3 today.

All cable companies (or companies in general) have debt. Take a look at their 10k. After expenses they still made 4 BILLION dollars. Spend, say 1/3 of that, on network upgrades (today) and they will no longer have capacity issues for the next few years. You are correct in that the demand for more bandwidth will continue to grow. But the way to handle that is to plan for the future and provide the capacity for that bandwidth, not to try and stop it. Essentially what they are doing is like a car company selling a car that you can only drive 40 miles a day. If you want to drive more than 40 miles a day, they are going to charge you $1/mile. All trying to do stuff like this is going to accomplish is to drive customers elsewhere.

As far as other ISPs watching this; sure if customers are actually stupid enough to put up with this, they will want in on the action too. If customers will put up with it, any business would be foolish not to try something that will ten fold their profit margins. There is nothing in this that the ISPs have to do this.

Use the profit to upgrade the network and invest in the company's future? Probably won't happen. They will use the profits to pay out dividends and increase the value of executive stock options.

You're deluding yourself if you think that looking ahead is limited to the goal of figuring out how they can provide more bandwidth for you. They're looking at money, it's fairly clear that Time Warner cares little about their front end infrastructure.--Come let us reason together.

You really do not understand how business works do you? In a consumer based market, if you do not keep up with what the consumer wants, you are going to loose customers. Loosing customers (in significant numbers) means that you are loosing money. The only reason companies reinvest in their infrastructure is so they can continue to be competitive. Fios did not come into play becuase it was a "cool" idea. It came about becuase it was obvious that ever increasing amounts of bandwidth were the direction things were/are headed. Cablevision understood this too (which is why they have 30Mbps D2 available today). Comcast even understands this, as evidenced by their rapid (relatively) switch to D3(despite their official caps, there has been no significant amount of action done to those that have exceeded the caps). Even Charter (broke as they are) recognizes that they have to offer more bandwidth (slower switchover to D3).

You really do not understand how business works do you? In a consumer based market, if you do not keep up with what the consumer wants, you are going to loose customers. Loosing customers (in significant numbers) means that you are loosing money. The only reason companies reinvest in their infrastructure is so they can continue to be competitive. Fios did not come into play becuase it was a "cool" idea. It came about becuase it was obvious that ever increasing amounts of bandwidth were the direction things were/are headed. Cablevision understood this too (which is why they have 30Mbps D2 available today). Comcast even understands this, as evidenced by their rapid (relatively) switch to D3(despite their official caps, there has been no significant amount of action done to those that have exceeded the caps). Even Charter (broke as they are) recognizes that they have to offer more bandwidth (slower switchover to D3).

If you think TW has been looking ahead, you are deluding yourself. It has been obvious what direction the bandwidth usage has been headed for years. Yet, TW still has a ton of systems still running D1.1 and D2. If they had really been looking forward, a significant amount of their footprint would be D3 today.